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A firm has 20 million shares outstanding with a market price of $25 per share. The firm has $10 million in extra cash (short-term investments) that it plans to use in a stock repurchase; the firm has no other financial investments or any debt.
#1.) What is the firm's value of operations after the repurchase? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.
#2) How many shares will remain after the repurchase? Round your answer to the nearest whole number.
Why do you believe that it is significant for managers to understand both short run and long run supply & demand? Cite one hypothetical or real life example that illustrates response.
The machine would have no effect on the firm's sales or revenues, but it is expected to save Kidd $20,000 per year in before-tax operating costs. The standard risk adjustment is 4 percentage points and its corporate cost of capital is 10 percent.
If the inflation rate was 4.0 percent over the past year, what was your total real return on investment?
A firm can issue an 8 year public debt issue at par with an 11 percent coupon in the domestic market. It can also issue 11.25 percent Eurobonds. If all other expenses are equal, which issue offers the firm the lower borrowing cost?
Assume Kathleen's computed depreciation expense of $140,000 per year. After three years, Kathleen's determined that the machine would last eight more years (for a total of 11 years). Compute depreciation expense for the fourth year.
How are compounding and discounting related? Explain time value of money.
Rosario corporation, which is located in Buenos Aires, Argentina, and manufactures a component used in farm machinery. The company's fixed costs are 4,000,000 each year.
An airline is planning a new promotional campaign to attract college students by offering them the right to fly stand-by at low rates when seats are not otherwise filled.
Mudvayne, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 18 years to maturity that is quoted at 106 percent of face value. The issue makes semiannual payments and has an embedded cost of 5 percent annuall..
Firms A and B have identical gross profit margins but B has a smaller operating profit margin. Which of the following is the most likely explanation?
Computation of the projects free cash flows and It has gathered the following information on each of these machines
An alumnus of your university gifted money to the school to provide annual scholarships to students. The school expects to earn an average rate of return of 9.5 percent and distribute $285,000 annually in scholarships. What was the amount of the g..
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